A New Plan for Metropolitan : Resources: A commercial development on the state hospital grounds could yield millions of tax dollars, city officials say. But facility operators fear such a project would harm their programs and mental patients.

NORWALK — A state legislator from Norwalk has joined city officials in an effort to set aside more than two-thirds of the sprawling Metropolitan State Hospital grounds for development.

The move is sparking opposition from mental health officials who said they fear that residential and commercial building would spell the end of the 77-year-old institution, a 162-acre spread of Tudor-style dormitories and neatly manicured lawns. Because of budget cuts and declining caseloads, several of its buildings have fallen into disrepair or become vacant in recent years.

Assemblywoman Grace Napolitano and city officials say a new development could yield millions of dollars in local and state revenues, and a large portion could be set aside to revamp the aging hospital, one of five state institutions for the mentally ill.

A preliminary plan drawn up by the city at Napolitano's request calls for more than 5 million square feet of office, retail and hotel space spread over 111 acres. The hospital facilities would be condensed onto 45 acres along Norwalk Boulevard.

The city estimates the development would create 16,520 jobs, generate $3 million annually in city sales and property taxes, $6 million in county sales and property taxes, and another $20 million for the state in property and sales taxes and revenues from leases.

"This land has great potential," Napolitano said. "And this is a (development) concept that can benefit the city, the state and mental health services."

Mental health officials said they worry that such a massive project would jeopardize the hospital's programs.

The hospital's caseload has been dwindling, from a peak of 4,140 patients in 1962 to 708 now, as the state has shifted patients from regional institutions to community facilities. But the facility still serves an important function, officials said.

"It's hard to find a place that offers such asylum to our patients, where they have a buffer between the outside and what they are confronting with their illnesses," said William Silva, the hospital's executive director.

Silva and other administrators said that reducing the amount of hospital grounds would be detrimental to patients, many of whom are acutely mentally ill and considered to be a danger to themselves or others.

He also said he doubts whether there would be room for all of the existing programs in the smaller area suggested by the city. In addition to the 708 patients under the state's supervision, 370 other patients live on the grounds. They are involved in a variety of activities, including a homeless shelter and two drug and alcohol rehabilitation programs.

Mental health officials point out that over the years the state has sold off hospital property in piecemeal fashion to private developers who have built offices and condominiums.

The facility once encompassed 250 acres and stretched about a mile beyond Ninth Street, its current southern boundary.

Mental health officials said they want to protect against further losses.

"It would be a real tragedy to lose a resource like Metropolitan," said Lauren Wonder, assistant director of the state Department of Mental Health. "This is not a city of Norwalk facility. It's part of the state system for the mentally ill."

Even if the state approved a development at the site, several obstacles would remain, including multi-year leases that Los Angeles County and private organizations hold on several buildings, mental health officials said. And the state has given historic status to 21 of the hospital's 89 buildings, meaning they cannot be moved or altered, the officials said. Napolitano says, however, that the buildings could be relocated.

Napolitano insists that she is not trying to shut down the hospital or infringe on its services.

"We do not want to hurt mental health. There is no hidden agenda here," Napolitano said. "We don't want to see the hospital closed (and) we're not pushing the hospital out. That has never been our intent."

Napolitano and Norwalk Mayor Luigi A. Vernola said that development would benefit the facility because new revenues could be earmarked by the state for mental health services and to remodel or even rebuild the hospital itself. A development could include a mix of commercial and residential uses, they said.

"Maybe I'm missing something here, but this seems like an opportunity to garner a substantial amount of money for the hospital and the city," Vernola said. "The (state) could take care of more of the mentally ill."

Napolitano has introduced legislation to create a nine-member commission to recommend new uses for the site. The Assembly is expected to vote on the measure in the next three weeks. Like the development idea itself, the bill has generated opposition within the mental health community.

A task force established by the state Department of Mental Health and the California Mental Health Directors Assn., a private organization, will be studying new uses for the hospital and two other state facilities later this year.